Moving out?
Some young man - for all I know, he could even work in the same building as me - writes about his personal finances, and considers the Toronto real estate situation.
He identifies two groups of buyers, young urban professional types, and older boomers who want a maintenance-free lifestyle. Well, there's another group - foreign (and domestic) investors who then rent out the pads. And I glare angrily at them for keeping up demand on the market, which keeps prices from slumping in the face of the construction boom gripping the city.
Like me, he doesn't like the prices much, nor the condo fees - bleh. And
apparently taxes on units are going up super-high, which is only good
if you're not living there - at least all those rich young folks and
investors give the city something back.
You'd think all this construction would slacken off prices, but no. That ECO100 lesson I'll always remember is the one where our professor point out that although condos may appreciate in value, you have to remember one simple fact: the supply is relatively flexible. You can squash an old building or dig up a parking lot and build another tower.
Houses, on the other hand, have an essentially fixed supply, unless you fill in the lake or run off to 905 suburbia land, which defeats the purpose of our exercise - finding a place to live in Toronto.
So since the supply of houses is hardly going to change, but demand will continue to rise in cities people want to live in, look for Toronto house prices to continue to climb towards the insane levels already seen in many European and American cities, barring some kind of crazy apocalypse, but then, real estate values will be the least of your worries.